Investing

Activist Driver Management Demands to Inspect AmeriServ Financial's Company Records

The heat has been turned up for Pennsylvania headquartered bank AmeriServ Financial (US:ASRV) this week as the banking sector focused hedge fund Driver Management Co has taken aim at the group’s management team.

Earlier today, Fintel reported that Driver Management Co LLC filed a 13D/A form with the SEC disclosing ownership of 1,477,419 shares of AmeriServ Financial, Inc. (ASRV). representing 8.6% ownership of the company. In the last filing dated January 19, 2023 they reported owning 8.60% of the company, indicating no change in their holdings.

Driver Management, founded and run by Abbott Cooper, filed two 13D/A forms this week highlighting letters that had been sent to AmeriServ’s board.

In the first filing on Thursday, Abbott Cooper disclosed that he sent a letter to AmeriServ’s Chairman Allan Dennison, calling out the management team for poor financial performance that was blamed on “unique economic realities”.

Driver Management believes ASRV’s Board needs to be reconstituted because of the significant underperformance and recommended the nomination of three new directors at the upcoming 20203 annual general meeting that would commit to putting shareholders first.

In the latest filing on Friday, Driver Management decided to exercise its right to inspect specific books and records of AmeriServ relating to the following documents.

Cooper is seeking to view the documents that describe and summarize the facts surrounding the “unique economic realities” and any further documents that references management steps taken to mitigate these impacts.

The hedge fund is planning on using these documents and references to determine whether AmeriServ was being poorly managed in light of the challenges faced.

Driver Management first disclosed its position in the company on the 18th of October with a 7.0% stake. News of the activist joining the shareholder register boosted the stock by almost 10% higher.

AmeriServ currently has a $68.5 million market cap and trades on an 8.2x PE ratio with a 3% annualized dividend yield. The ASRV share price has traded broadly flat over the last 5 years when excluding the share price dip during the pandemic.

Fintel’s management effectiveness chart from the financial metrics and ratios page for ASRV highlights a significant decline in the CROIC (cash return on investor capital) over 2022.

AmeriServ Financial, Inc. is the parent of AmeriServ Financial Bank and AmeriServ Trust and Financial Services Company in Johnstown, PA. The Company’s subsidiaries provide full-service banking and wealth management services through sixteen community offices in southwestern Pennsylvania and Hagerstown, Maryland. The Company also operates loan production offices in Altoona and Monroeville, Pennsylvania. At September 30, 2020, AmeriServ had total assets of $1.3 billion and a tangible book value of $5.36 per common share.

What are other large shareholders doing?

Gendell Jeffrey L holds 1,054,816 shares representing 6.16% ownership of the company. No change in the last quarter.

M3F, Inc. holds 945,074 shares representing 5.52% ownership of the company. In it’s prior filing, the firm reported owning 986,762 shares, representing a decrease of 4.41%. The firm decreased its portfolio allocation in ASRV by 0.22% over the last quarter.

Renaissance Technologies Llc holds 658,684 shares representing 3.85% ownership of the company. In it’s prior filing, the firm reported owning 684,351 shares, representing a decrease of 3.90%. The firm increased its portfolio allocation in ASRV by 10.94% over the last quarter.

West Chester Capital Advisors, Inc holds 611,927 shares representing 3.58% ownership of the company. In it’s prior filing, the firm reported owning 609,258 shares, representing an increase of 0.44%. The firm decreased its portfolio allocation in ASRV by 22.48% over the last quarter.

Bridgeway Capital Management Inc holds 261,771 shares representing 1.53% ownership of the company. No change in the last quarter.

What is the overall Fund Sentiment?

There are 63 funds or institutions reporting positions in AmeriServ Financial, Inc.. This is a decrease of 0 owner(s) or 0.00%.

Average portfolio weight of all funds dedicated to AmeriServ Financial, Inc. is 0.1322%, a decrease of 8.8243%. Total shares owned by institutions decreased in the last three months by 2.28% to 7,178,039 shares.

Fintel’s Fund Sentiment Score is a quantitative model that ranks companies from zero to 100 based on Fund Sentiment. Fund Sentiment is important because it tells you if funds are buying or selling – and in particular how the company ranks compared to other companies in the investing universe. Click to see the Fintel Fund Sentiment Score for ASRV / AmeriServ Financial, Inc..

This article originally appeared on Fintel

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